As Bitcoin gains traction in the Republican Party, especially with the support of former President Donald Trump, lawmakers are increasingly positioning the cryptocurrency as a cornerstone of U.S. economic growth.
U.S. Senator Cynthia Lummis is at the forefront of this movement, advocating for the Bitcoin Act, which aims to create a strategic Bitcoin reserve for the United States.
A Bold Solution for the Financial Crisis
In a recent interview with Bankless, Lummis outlined her vision for the Bitcoin Act, highlighting its potential to address the nation’s staggering $35 trillion debt, which she argues has no viable solutions under current fiscal policy. Lummis believes that creating a Bitcoin reserve is the only rational approach to managing this debt crisis.
The proposed mechanism for the Bitcoin reserve would see the US government re-price gold certificates, which are currently valued at their historical rate since 1917, to their current market value of approximately $2,400.
The senator plans to use the difference to buy BTC over a five-year period, with the goal of acquiring over a million BTC — roughly 5% of the total supply — and storing it safely in a cold storage facility for twenty years. Lummis claims this strategy could effectively cut the national debt in half by 2045.
Lummis emphasized that this approach also allows the government to invest in bitcoin without affecting the U.S. balance sheet or accumulating additional debt. She sees bitcoin as a solution she has sought throughout her career, arguing that its non-government asset characteristics make it a more reliable backing for fiat currencies than traditional stocks or other fiat currencies.
A Global 'Arms Race' for Bitcoin?
Responding to concerns about the devaluation of the US dollar, especially during the COVID-19 pandemic when unprecedented amounts of US dollars were printed, Lummis highlighted BTC’s scarcity as a key differentiator. She described it as a true diversifier that does not suffer from the same inflationary pressures as fiat currencies.
In a thought-provoking statement, Lummis suggested that the future could see an “arms race” not for dominance in weapons, but for Bitcoin as a reliable store of value. She noted that countries like the US, China and Russia are increasingly competing to establish themselves as leaders in the cryptocurrency space.
Following her speech at the 2024 Bitcoin Conference, there was a noticeable increase in letters from constituents urging support for the Bitcoin Act. The bill is currently referred to the Senate Banking, Housing, and Urban Affairs Committee for further consideration.
This call for Bitcoin reserves is consistent with Trump’s vision of positioning the United States as the “crypto capital of the planet.” The former president has emphasized the importance of maintaining robust reserves of Bitcoin and cryptocurrency, warning that neglecting to do so could allow countries like China to gain an upper hand in the global financial landscape.
Trump has reaffirmed Bitcoin's potential as a modern currency, citing support from those around him and calling on the government to recognize its benefits.
